According to a decision of the Financial Ombudsman dated 06 August 2021 the guarantor’s complaint was accepted and the Ombudsman called on the licensed credit institution and by extension the Hellenic Bank to return to the Complainant the seized amount of €238,875.95 (plus interest from 1.1.2021 to 8.7.2021) and thereafter, fully exempt him from his guarantor obligations in relation to the loan.
The guarantor through his lawyers Y. Georgiades & Associates LLC submitted on 07/01/2021 a complaint to the Hellenic Bank, but did not receive a reply within the three months specified by law. Subsequently, an immediate complaint was filed on 08/04/2021 to the Financial Ombudsman.
The Guarantor stated in the complaint that, as far as he was informed orally, the Primary Lender does not pay his instalments as he should under the agreement. He further stated that despite the latter, he did not receive any notice of any “default or breach of any promise or obligation under the Loan Agreement” and therefore the Financial Institution failed to inform him without delay as it should, of the non-payment of instalments by the Primary Lender.
The Financial Ombudsman took into account Articles 2(1), 10(1), 37(1) and 97 of the Law of Contract CAP. 149, Aricles 3(1), 12, 13(1) of the Protection of a Certain Category of Guarantors Law and Articles 4(2), 48(1) and 50(4) Appendix IV 1(ιη) of the Consumer Protection Law of 2021.
The Financial Ombudsman concluded as follows:
“A. THE SUBMITTED COMPLAINT IS FULLY JUSTIFIED, as set out in paragraphs 1 to 5 hereof, for the reasons set out in the CONCLUSIONS above. Therefore the complaint IS ACCEPTED.
B. The licensed credit institution and by extension the Hellenic Bank is orders to return to the Complainant the seized amount and subsequently to fully relieve him of his guarantor obligations in relation to the loan.
C.We note once again the complete paradox but also characteristic of the approaches taken by the Hellenic Bank vis-à-vis its client. The fact that, while on 31/05/2021 there was an assurance that there were no delays in installment payments, on 02/06/2021 the Complainant received from the Hellenic Bank, by notification, the letter sent to the Primary Lender for the full and complete repayment of the loan. In addition, the Hellenic Bank’s move on 08/07/2021 to seize the frozen amount of the guarantor to repay the loan is also of great concern, without first informing him of the primary lender’s non-compliance with its request for repayment. It should be noted that the letter, dated 08/07/2021, from the Hellenic Bank to the Complainant was sent after the seizure in question had already been carried out.
D. The Ombudsman should stress that the problem of the situation as described should be attributed, to a very large extent, to the structure of the contract documents, which the Complainant was obliged to sign, with the licensed credit institution i.e. the former SPE Strovolou. As a result, the SEDIPES/KEDIPES should assume a very significant part of the responsibility for the damage suffered by the Complainant.”
The complaint on behalf of the Complaining Guarantor was submitted by the law firm Y. Georgiades & Associates LLC.